City pay is on the up

This just doesn’t add up. City pay has risen six per cent in a month, according to a survey by recruitment firm Morgan McKinley, and the average City salary was £53,223 (excluding bonuses). The report monitors the job situation in the City and beyond for July, compared to June and last year.

The important line:

The average City salary was £53,223, registering a 6% increase on June 09 but a 1% decrease versus a year ago (July 08)

The reason, says Andrew Evans, Managing Director of Morgan McKinley’s financial services division, is that “with slightly more competition between employers to secure the very best talent, the average City salary crept up last month. Hiring managers are looking for candidates who have multiple skill sets and who are the star performers in their field and they are offering these individuals competitive salaries to secure them.”

Forgive me if I am missing something, but at a time when there are pay cuts, freezes and redundancies, these City figures seems somewhat misplaced. While in theory I am an advocate for credit where credit is due and performance-related pay, in the context of the huge scale of public sector support offered to banks, surely we can not continue the practice of paying extortionate bonuses.

These revelations, combined with the ongoing raging row over bankers and their hefty bonuses, will do yet more damage to London’s reputation as a financial centre. It is hardly surprising that Compass, a left-of-centre pressure group, has launched a campaign to crack down on excessive salaries and is pressing the Government to set up a High Pay Commission to regulate the pay of top earners. Alistair Darling, has said that he would bring in legislation if it was necessary to control "systemic risk" to the banking system. Well yes Chancellor, necessary I think it is.